Abstract:

The Turkish Code of Obligations No: 6098 includes provisions in Article 603 expanding the scope of guarantee contracts, which are not covered by the Swiss Code of Obligations inspiring this code, or the repealed Turkish Code of Obligations No: 818. According to the new law, provisions regarding the legal capacity of the guarantor and the form of guarantee, including consent of a spouse, shall apply also to other contracts regarding personal guarantees. This law has created ambiguity with respect to the scope of the provisions on guarantee contracts and led to arguments that, in principle, all personal guarantees are subject to the additional conditions in these provisions. The question of whether the relevant provisions comprise also the surety contracts under the Turkish Commercial Code has been responded differently by academia and the courts. It could be fairly argued that the relevant provisions apply also to surety contracts, which imposes more burdensome obligations for guarantee, as it is also a personal guarantee in essence. Further, given that provisions regarding protection of individuals lacking legal capacity prevails upon the need to protect tradability and transaction security of bills of exchange, this argument prima facie appears to be plausible. This said, assessing these general provisions in the same context of security contracts, and applying them to bills of exchange is not practicable. Such an argument would prevent applicability of article 701 of the Turkish Commercial Code.

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